Grant Shipley wrote:
> After much discussion back in August (on this list) over why gas was
> so expensive......
>> I think we have the answer now.
Oil companies don't set the price of oil- the market does that. Market
forces such as terrorism fears, natural disasters (e.g. hurricanes), and
politics all play into that. 2005 contained an unusualliy high number of
these factors and consequently, the oil companies profited big time from the
market-driven price increases.
Think of it this way: If you make 10% profit on a candybar that retails for
$1.00 and demand for that candy bar pushes the price to $1.50, your profits
are going to go up 50% as well. The oil companies aren't taking a bigger
slice of the piece, their slice is just worth more money.
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